Speech – Global Heads of Mission Meeting, Canberra

SENATOR THE HON SIMON BIRMINGHAM
Minister for Trade, Tourism and Investment
Deputy Leader of the Government in the Senate
Senator for South Australia

E&OE TRANSCRIPTGlobal Heads of Mission MeetingTopics: Australia’s trade and economy; International Australian diplomacy and free trade agreements; export opportunities for Australian businesses; opportunities for regional Australia; diversification of Australian trade.

11/09/19

09:30AM

Thanks so much Frances for that introduction and everyone, it’s wonderful to be with you all this morning. Of course, yes you all know that when you see the bio, it says Senator for South Australia there and so you know to play a little bit of parochialism in the wine that you serve and so on. But it’s important to remember it’s not just me. I did, the other weekend in Adelaide, send Frances a selfie I took of myself with Frances’ mum who I ran into at a function in Adelaide as a reminder to all of you, of course, that the Departmental Secretary has those same parochial preferences when required. So let’s apply that right across the board. Can I start by thanking you, as I know the Prime Minister did yesterday and Marise did yesterday, that Mark and I share that perspective, that we value the work that you do, the sacrifices that you make, and the professionalism that you reflect out to the world.

I’m going to focus, as Marise indicated yesterday, unsurprisingly of course on the trade and the economic aspects of our posture to the world. It’s important firstly to remember we are the 13th largest global economy. That carries with it weight and responsibility. It’s disproportionate relative to our population. We’re around the 53rd most populous nation in the world. So it’s our economic strength that buys us seats at the table. We wouldn’t be a member of the G20 if it was determined on population. We wouldn’t have that additional clout or influence. We wouldn’t be considered a significant middle power necessarily if it were calculated on population. And so, the work we do in maintaining the economic strength of Australia is not just work that’s important for our economy and that’s critical, of course, for – as the PM likes to remind us, we don’t have a strong economy just for the sake of it. We have a strong economy because it gives Australians jobs, a way of life, because it funds the essential services that we are so proud of and that many of you see as you move around other nations of the world. We have some of those best services and social supports around the globe in many cases, and that’s all possible because of that strong economy. But it also funds a strong diplomatic presence. It means that when we invest 2 per cent of GDP in our defence spending, it has might because it’s 2 per cent of GDP of the 13th largest economy in the world, not of the 53rd largest. So, it’s important to remember in all that you do – when I drive home and the PM drives home and the Treasurer and Marise and others, the importance of that economic and commercial diplomacy. First and foremost, it is what buys all of you, as our representatives overseas, greater standing, greater stature, greater capability behind you because it is indeed of those economic strengths that we have.

And I know that’s well understood and was very well reflected in the 2017 Foreign Policy White Paper, which, in all of that document, if I narrow in to Page 51, four dot points stand out and are worth repeating and remembering: that we stand and our trade and economic policy in particular is guided at a global level by resisting protectionism and advocating for an open global economy; to work determinedly with partners and in global institutions to protect and shape rules that promote economic growth, trade liberalisation and free markets; to ensure the lowest possible barriers to our trade and investment including through modern free trade agreements; and to work with Australian businesses to advance our commercial interests in overseas markets. I don’t want to say too much today, but I do want to drive home the criticality of those four points for everything that we do in this space, that together with Mark Coulton as the Assistant Minister in the trade aspect of the portfolio, this is what we want to drive as our crucial messages.

Now, of course, how do we do that and what’s important from the Government as we go about it? Firstly, the desire that operationally we have to take whole of government approaches and perspectives. You are the leaders of our overseas posts and our agencies, be it DFAT and Austrade – and I recognise Stephanie Faye here today – joining up with our other agencies: agriculture, education, industry, Tourism Australia, all of those who have representatives including our state and territories, in our international locations need to make sure that we are joined up and linked up to provide the best possible advice support and maximum impact. We may be that 13th largest economy but resources are still finite as you all know and occasionally remind your ministers. And what we have to do is leverage each of those points and I know you seek to do that out of the staff that you lead from different agencies in your different missions and we want to ensure that the importance of that linked up, whole of government approach is with a ministerial mandate.

You also need, in the economic space, to reach out in terms of how you can provide real value to the private enterprises with whom you engage. We see Australian business reaching out to the world. This morning Frances, Stephanie and I together with a number of Head of Mission, hosted a working breakfast with leaders of industry from around Australia. These are businesses who operate across multiple different global locations and engage with all of you in doing so. They engage because you can add value to the opportunities that they’re creating in those markets. But to do so you need to be making sure you build capability, build capability in understanding their commercial interests, build capability in understanding the advice that you can give. With reward there is always risk and your advice around the risks of overcoming language, inconsistent regulations, challenges of culture can be critical to ensuring the success of those businesses. You should be working with your host countries in particular to tackle some of the systemic issues that can hold us back.

As a Government we have, thanks to your hard work, enjoyed enormous success in opening up access for Australian markets around the world. The PM now, and the Treasurer, and all of us often quote the fact that when we were elected Australian goods enjoyed preferential access in around 27 per cent of our export markets for export, the scale of our exports. That is now growing, that around 70 per cent of Australian exports enjoy preferential access in markets. That’s thanks to the network of FTA’s that have been negotiated that you have played a role in doing and we’re committed to continue to grow that. But as we lower those tariffs, as we eliminate those quotas and work that Mark and I want to see us really shift a gear on is breaking down the non-tariff barriers that exist because with fewer tariffs, with fewer quotas in place the challenge we will face is that other barriers will and are being put into place that restrict our success on the trade agenda.

So we want to continue to make sure we expand that market access, but we do so also in new and practical ways. FTA’s though remain a big deliverable for Government and we want to ensure that we continue to give business an opportunity to diversify, to explore new markets that may have previously been difficult to crack. The priorities there are well known. RCEP, with a timeline of trying to conclude this year, it has enormous opportunities if we can seal it. It won’t be our highest level ambition agreement that’s for sure, and that’s well understood, but it will still be a substantial agreement. If we get it with all 16 countries it will be the first time we have a trade agreement in place with India. With or without India it will provide for breakthroughs in terms of more common rules of origin, opportunity for our Australian business to better integrate into value chains across our region, leading provisions that take countries in the RCEP partnership to WTO plus terms in areas such as e-commerce. So, good gains that can be made as well as of course still market access breakthroughs in a number of sectors.

In the EU, and I look forward to taking this opportunity later this morning to sitting down with many of you from our different EU posts to talk about how we continue to advance and work on the EU FTA. Work on the Pacific Alliance, post-Brexit UK – whatever happens there, the India Economic Strategy being a non-FTA but a critical component as well of demonstrating how we can strategically think about deeper, greater engagement with countries to advance our trade agenda outside of purely the structured process of FTA’s.

The government wants politically to live up to our end of the bargain as well, we are working as hard as we can in the work that has been done to deliver deals in Indonesia, Peru, Hong Kong, to now seek to get those legislated, ratified and to achieve entering into force. With your help on the advocacy, the merits and the arguments behind those are crucial and I thank you for your work in doing so, whilst our work is to navigate the politics of the parliament in achieving the type of bipartisan support, ideally, that has historically enabled our trade agreements to come into force, but one way or another to get the numbers through this Parliament to achieve those outcomes.

In addition to the obvious of trade, investment is a crucial part of the work that you all do. We need to make sure that we continue to grow our economic engagement by maintaining, enhancing our reputation as a world leading investment market. We often cite that one in five Australian jobs are trade related but one in 10 Australian jobs are in place because of foreign investment into Australia. And that foreign investment into Australia can often save jobs in an ailing or failing business, as well as create new jobs in new industries and new sectors. Our posts need to anticipate the uncertainties of investors, you need to understand the full breadth of government economic policy to be able to sell Australia’s economic miracle with confidence. Those 28 years of unprecedented economic, of uninterrupted economic growth – yes we’ve seen a downturn, but unlike many of the countries that you represent we haven’t recorded a negative quarter of growth. And these are positive stories to show what a stable and successful place for investment Australia is.

Our foreign investment review process sometimes comes under scrutiny but of course we remain far more open than most other countries of the world. You need to make sure that you normalise, contextualise that process and, as I know you do, to encourage potential investors to engage at the earliest possible opportunities in terms of with government agencies to get the smoothest, best possible outcome. It’s simply good governance for a country like ours to screen investment in critical assets to ensure that it is in our national interest. It’s not a process that targets countries but it is a process that ensures that we do maintain the social licence for investment.

But also critically important, Australian investment overseas. Thanks to our growth in superannuation funds we have an enormous savings pool that now exists from Australia. And we have many companies – those of which who were with us at the breakfast this morning – who are outward looking in where they can invest. Investment overseas sees new opportunities for Australians to have employment overseas, profits that are repatriated back expands our global influence, expands the strength of those global companies. And so ensuring the two-way flow of investment is a crucial part of our work. Also using our diplomatic posture in relation to WTO and rules based trading. Over the last few months you’ve heard myself, the PM, Minister Payne talk about these issues at some length I’m sure in the various cables and missives that have gone around.

I want to encourage all of you to ensure that Australia’s position as an independently minded nation and working again in our national interest is well understood. We support very clearly the rules based trading system with the WTO at its core. We acknowledge it’s far from perfect and there are many areas for improvement. But rules not muscle, not might, not the size of your economy, should be the organising principle for economic trade. That is how a country of our size let alone the many countries smaller than us, can manage to grow and do so without facing abuse of market power. Being vocal about this position in a measured way gives us credibility amongst nations across different development perspectives, across different regions of the world because it shows that we are standing for our principles and working hard for principles that benefit all of them as well. And of course the opportunities to do that as well as to build an understanding of the strength of our economy and to continue to advance for more open trade liberalisation, rather than embracing some of those who argue for greater protectionism or opportunities that we seize at the bilateral level as well as through the various multilateral four of APEC, G20 and otherwise.

So the message really is that our economic and commercial diplomacy put at the heart of our foreign policy, White Paper, reinvigorated last year through the agenda that the Foreign Minister and I launched is crucial to the work that you do. The integration with Australia in particular between DFAT, you must work as a single entity projecting out to Australia in- projecting out to the world for Australia in every possible way. With that I’m going to hand over to Minister Carlton I believe and to say a few words particularly focused on some of our regional aspects as well as building the support in Australian business and industry for trade. What is one of the pleasing things to see at present is we’re not just growing trade volumes, but we’re growing the numbers of businesses engaged in trade and that bodes very well for our long term future in terms of those businesses being able to create even more opportunities into the future. And Mark has played alongside agency as a key role in advocating for that through the various FTA seminars that he’s led.